[Book Review] The Essential von Mises 📖

A particularly valuable book if you want to get acquainted with the history of economic thought in the last hundred years is 'The Essential von Mises' by Murray N. Rothbard.

Rothbard presents the Austrian school of Carl Menger and onward. Mises's ideas are therefore placed in a line of development, and one thus sees clearly how much he owes to his predecessors as well as which of his contributions to economic science are entirely his own.

You also get to know how Mises influenced other economists and social philosophers. Mises presented the Austrian theory of business cycles in 1912 in The Theory of Money and Credit and further developed it in some later essays. According to this theory it's the involvement of the state in the monetary system that is the culprit, the state's artificial credit expansion that gives rise to the boom-and-bust phenomenon. On the basis of his theory, Mises predicted an economic crash, at a time (1920's) when other economists predicted uninterrupted prosperity, guaranteed by the state's 'benevolent' and 'far-sighted' manipulation of the monetary system. As we know, it was Mises who got it right. And this fact got the economic community to open their eyes, if not completely then at least ajar. An "Austrian revolution" in economics definitely couldn't be seen on the horizon.

All this was brought to an abrupt end in 1936 with Keynes' General Theory (see my review of it here). It wasn't Keynes who introduced inflationism: it had been long practiced by Western governments, but they had done so with a bad conscience; it was regarded as economically unsound. Keynes only made inflationism appropriate.

Mises's ideas nearly fell into oblivion. Today, when the consequences of Keynes are, or should be, obvious to all, there is a chance to revive them. The Mises Institute is doing a great job, of course.

Rothbard's writing is quite advanced, but not that it should deter anyone. He was a master at explaining complicated context in a simple way. The economically uneducated, who has never heard of "marginal utility" or "time preference", for example, has a great opportunity to learn what these terms mean. But above all, to get to know a great thinker and man, Ludwig von Mises.

You can read the book in its entirety for free on Mises.org: https://mises.org/library/essential-von-mises